The opinion of the court was delivered by: SWEET
Plaintiff United States of America (the "Government" has moved for summary judgment under Rule 56, Fed.R.Civ.P., against defendant Joseph L. DeFLippo ("DeFilippo" in. the amount of $12,645.56 plus accrued interest at four percent per annum from February 18, 1985, arising out of a home loan obtained by DeFilppo and guaranteed by the Veterans Administration. On the following findings and conclusions, the motions granted.
This action was filed by the Government on September 26, 1985 alleging that DeFilippo owed the Veterans Administration (the "Administration") $12,500 plus interest, the amount paid by the Administration under its guaranty of the mortgage which had been obtained by DeFilippo and which has been foreclosed.
On February 26, 1986, DeFilippo moved to amend his answer to include a defense of the statute of limitations. In that connection, the Government took his deposition on March 13, 1985, at which time DeFilippo stated that he had purchased the property underlying the mortgage as an investment with a business associate, that he had never lived there and had never intended to live there. DeFilippo further stated that he had never seen the property. He also testified that he did not realize what he had signed.
On March 25, 1986 the Government moved to amend its complaint to add a claim of common law fraud and filed its amended complaint on April 18, 1986. An amended answer was filed on May 27, 1986, alleging that the action is barred by the statute of limitations and by the Government failure to notify DeFilppo of the foreclosure. This motion was heard and finally submitted on September 12, 1986.
On March 10, 1971, the Administration received a one-page "Application for Home Loan Guaranty," VA Form 26-1802a, signed by DeFilippo who had been president of his own business for several preceeding years. The application, after setting out the particulars of the loan, the purpose of the loan,
security for the loan and the personal and financial status of DeFilippo, contains a section called "Certifications." The section states, in pertinent part:
THE UNDERSIGNED VETERAN CERTIFIES THAT:
The foregoing is true and complete to the best of my knowledge and belief....
22A. The purpose of this proposed loan is to finance the [x] PURCHASE [ ] CONSTRUCTION of the residential property identified herein which l now actually occupy as my home or intend to move into and occupy as my home within a reasonable period of time after completion of the loan.
24. SIGNATURE OF VETERAN (Read certification carefully before signing)
The application was signed by DeFilippo immediately under the language set forth above. His signature not only appears on the documents directly below the certifications, but in the very space he signed are the words, "Read Certification Carefully Before Signing."
Based on the certification and the other information submitted, the Administration approved DeFilippo, application for a Home Loan Guaranty and issued a Loan Guaranty Certificate. The closing occurred on April 20, 1971. At that time DeFilippo signed the mortgage and the mortgage bond and a "Borrower's Statement of Liability-GI Loan," VA Form 26-8106. That document informed DeFilippo that he was obligated to repay the loan, even if he transferred the property. It also advised him that he would not be relieved from liability on any guaranty claim which the Administration may become required to pay the lender. He also signed a "Certification of Loan Disbursement," which repeated the certification language set out above to the effect that the purpose of the loan was to finance the purchase of the residential ...